2025 Private Company executive compensation survey: Key findings
We asked 500 private companies—with revenue from $500 million to $20 billion—how they approach employee rewards, including both short- and long-term incentive plans. From family-owned businesses to private equity-backed organizations, our December 2024 survey uncovered the latest trends shaping executive compensation across a wide range of industries.
Key takeaways
What insights did our executive compensation survey uncover? Here are some noteworthy highlights:
- Variable executive compensation drives alignment with goals:
Organizations leverage a mix of variable pay programs—like annual employee incentives, team bonuses, and recognition—to align employee performance with business goals. - Annual incentives dominate, but access is limited:
Annual incentive plans are the most common short-term employee rewards, yet participation is typically reserved for director-level and above. - Balanced metrics boost performance:
While financial measures (profit, revenue) are most common, non-financial metrics—such as customer satisfaction and talent benchmarks—are increasingly used to drive engagement and results. - Long-term incentive (LTI) programs are valuable tools that private companies can leverage:
LTI programs can help achieve a range of compensation objectives and help align leadership with the performance of the company and reduce turnover.
Short-term incentive plan findings
Short-term employee incentive plans become more sophisticated as companies mature and improve their financial planning. Clear goals and a mix of financial and non-financial metrics are essential for attracting and retaining top talent, particularly senior leaders.
Long-term incentive plan findings
Eighty-two percent (82%) of private companies offer long-term incentive plans, primarily to align senior and mid-level leaders' interests with the organization's long-term goals and reduce turnover. Expanding these executive compensation programs can further boost employee engagement and support organizational goals.
Wolfe Tone
